Question

We, every now and then, read in the newspapers that some banks are earning good profits while some are not doing so well. The major part of a bank's profit generally comes from which of the following activities?
(A) Providing banking services like opening accounts, providing safe deposit vaults, etc
(B) Remittance facilities. collecting cheques, etc

(C) Interest on loans, the investment which banks make, by using money of the depositors.

• A. Only (A)
• B. Only (B)
• C. Only (C)
• D. All (A), (B) and (C)

Answer 1

The correct option is D All (A), (B) and (C)

A commercial bank is that financial institution which accepts deposit from people and offers loan for the purpose of consumption or investment. They make profit from the following activities:

A. Providing banking services like opening accounts, providing safe deposit vaults earns them a small amount of profit.
B. Remittance facilities. collecting cheques etc are the services which are charged.

C. Interest on loans, the investment which banks make, by using money of the depositors.